Starz lays off 10% of staff and exits UK and Australia ahead of Lionsgate split

Starz plans to lay off 10% of its staff and exit the UK and Australia before parting ways with Lionsgate next year.

The news was shared today in a memo from CEO Jeffrey Hirsch to employees (read it below) and confirmed to Deadline by a person familiar with the moves.

“As difficult as it is and as many of our employees are affected, we are making these changes to align our organization with the company’s growth areas and prepare for our next chapter as an independent company,” Hirsch wrote in the memo. .

Starz was acquired by Lionsgate for $4.4 billion in 2016, but the parent company has received offers and explored other strategic options in recent years. The final separation plan, which has been delayed in recent months due to Lionsgate’s purchase of eOne and other factors, will take effect in the first half of 2024. The rotation creates two separate, listed entities.

After investing in an ambitious plan to expand its streaming service worldwide, Starz has scaled back in recent months. Lionsgate announced last summer that Starz would be exiting Latin America, although at the time it was expected that the UK would remain a core territory alongside the US and Canada.

Unlike premium cable rivals HBO and Showtime, which are also making the leap into streaming, Starz has sought to carve out a niche for itself in the market as a supplemental offering rather than a broader mainstream entertainment offering. As of June 30, it had 26.3 million subscribers, most of them on streaming rather than linear television.

Hirsch said in September that he was “upset” about the divorce. “I don’t think the Starz story is as clear as it could be because we’re part of a bigger company,” he said during an appearance at the BofA Securities Media, Communications & Entertainment Conference.

Lionsgate will announce its quarterly results next Thursday.

Here’s Hirsch’s full memo:

This morning we announced a company-wide organizational restructure, including the move away from the UK territory. As difficult as it is and as many of our employees are affected, we are making these changes to align our organization with the company’s growth areas and prepare for our next chapter as an independent company.

Critical to our successful transition from a purely linear company to the new digital world is our intense focus on the changing environment, anticipating what lies ahead and adapting the organization to thrive in this disruptive environment. This is why we continue to distinguish ourselves as one of the few profitable premium networks.

As I have said many times, I believe we have the best team in the industry and value the contribution of every employee, which makes these organizational changes even more difficult. We want to ensure that those affected are supported today and that their transition is as easy as possible.

We will have the opportunity to discuss these and other changes in our upcoming Business Update. Meanwhile, your leaders will share information specific to your area.

Jeff